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Group Life

General FAQs

These are some of the more frequently asked questions we hear about Group Life cover. But your needs will reflect the individual nature of your business, so we're also happy to answer other queries. Call us on 0845 300 4452. We're happy to help.

Would I have to cover all of my employees?

You could choose to cover just one level of employees, Directors for example. Or, you may want to introduce a fixed probationary period for your employees, before they are eligible to receive Group Life cover. You may decide to allow entry to your company's scheme at schedule points during the year - monthly or annually - depending on length of service with the business. However, it is important to ensure that you do not breach aspects of employment or discrimination law by unlawfully favouring certain workers, or groups of workers over others, it is illegal to discriminate against employees, job seekers or trainees on grounds of age.

The benefit basis and terms must be the same for every individual in different categories if these are applied.

Does everyone have to be covered at the same level?

You can select different categories for employees and directors. You can then assign a different benefit basis per category, e.g. providing a higher level of benefit to directors of the company. You could also decide whether to select a fixed benefit or multiple of salary per category covered. The benefit basis and terms must be the same for every individual in different categories if these are applied.

If my employees are living overseas, would they be covered?

We can consider covering employees who are resident overseas, as long as they have a contract of employment with a UK company covered by this policy.

For more information please contact us.

What benefits are available for a registered Group Life scheme?

Our Group Life product provides a lump sum on the death of an eligible member of the scheme, which can be a multiple of salary or a fixed sum. Additionally there can be a dependant's pension on death in service or even a child's pension. Quotes can be provided for different scenarios upon request.

What about a non-registered excepted scheme?

Excepted Group Life policies are currently outside the registered pension scheme tax rules, and allow payments to be made in excess of the Lifetime Allowance, without being subject to a Lifetime Allowance charge. Excepted Group Life policies can only provide lump sum death benefits, a dependants pension cannot be included as part of the policy. These lump sums do not count towards the Lifetime Allowance, without being subject to a Lifetime Allowance charge. Excepted schemes can run alongside a registered scheme (sharing the same unit rate and free cover limit) or they can be standalone.

How are the premiums taxed?

Contributions into a registered or an excepted policy are, in most cases, treated as a normal business expense. For a registered scheme, lump sums payable on death are normally tax-free unless a member is a particularly high earner or has significant registered benefits elsewhere that take them over the Lifetime Allowance. For excepted schemes, lump sums are usually tax-free.

Our Group Life policies, whether registered or excepted, are written under trust and are not subject to income tax or inheritance tax under current legislation. All pensions are taxable under PAYE and death-in-service pensions benefits are subject to income tax but do not count towards the Lifetime Allowance, but tax laws may change in the future.

Do we need to collect medical evidence from our employees?

If your employees need to be medically underwritten, we'll either use a medical declaration form or ask them to take part in a Teleinterview. We may need more evidence, but employees are usually covered for a period of 90 days (up to a maximum of £1million for benefits above the FCL or previously accepted benefit), while medical underwriting is being completed, subject to any pre-existing conditions.

Can cover carry on while an employee is absent from work?

If one of your employees is off work due to illness or injury, cover can continue to the policy cease age as long as premiums continue and a contract of employment is maintained. If absence is for any other reason, cover may continue up to a maximum of 36 months.

When will an employee's cover stop?

Cover normally stops for your employees if they leave service, leave the scheme, retire or die. Your company can cancel the policy at any time and we may cancel our cover if premiums are not paid.

What happens when a scheme member dies?

We usually need to see the original death certificate, any marriage or civil partner certificate and birth certificate of the employee. A claim form needs to be completed and signed on behalf of the scheme Trustees by an authorised signatory. If payment is not to be made to the Trustees' account, then we'll need a completed form of discharge for payment to a third party.

What's needed to set the scheme up?

To give you a quotation, we'll need the following details about your employees:

Age

Gender

Occupation

Location

Country of residence

Salary

Proposed level of cover

But to help with the administration, we can provide an electronic template for these details. We'll also need to find out about any long-term absenteeism, previous underwriting decisions and claims history. Then, you need to complete a Trustee Proposal, Scheme Details form and membership schedule on behalf of your company. For new schemes we can provide a combined trust deed and set of rules and your scheme's administrator will need to register with HM Revenue & Customs. For existing schemes, you can use an existing Trust, rules and registration. We will need to know your existing registration number.

Can I transfer a policy from another provider?

Yes. Providing there has been no break in cover, we can usually switch over automatically and allow 'no worse terms' to apply. Your employees can be given the same levels of benefit as they had previously as long as this falls within our maximum benefit terms.

Helping you, to help your employees…

We're always happy to talk about our range of Group Risk products and explain them in more detail. If you'd like to set up a meeting, or just have a few queries, you're welcome to call us on 0845 300 4452.